Best Near-Term Price Gains Ahead For: Aerospace And Defense Stocks

Includes: SPY
by: Peter F. Way, CFA


Market-makers [MMs] hedge big-money-fund portfolio manager trades in these stocks every day, to protect their firm’s capital temporarily put at risk filling large volume trade orders.

That price-change insurance tells just how far the MMs expect those clients, who have the money muscle to make things happen, may push prices – both up and down.

These stocks have histories of daily forecasts, many over 5 years or more, at all levels of market enthusiasm and despair. Today’s forecasts provide expectations for the next few months.

Looking back at prior forecasts with similar upside-to-downside prospects tends to put price volatilities, issue by issue, in perspective.

Looking for better prospects among these stocks than ones you now have? Looking for new entries into this set? Here are Risk~Reward tradeoff comparisons to help you choose.

Major Aerospace & Defense Stocks

Figure 1

(used with permission)

Each stock is positioned in this map by its intersection of upside price change forecast on the green horizontal scale and the price drawdown exposures (on the red vertical scale) typical after prior forecasts like today's. Any issue above the dotted diagonal has more potential risk than return at its present price.

Since price-change risk is a dynamic, not a constant, in time these exposure relationships will change.

Other useful details from similar prior forecasts

Figure 2


Columns (5) and (6) are the source for Figure 1 coordinates. The (7) metric tells what % of the (2) to (3) range lies below (4). It discriminates among (12) prior forecasts to select the similar sample from which columns (8) to (14) data is provided. (13) compares (5)'s promise to (9)'s prior delivery; (14) compares (5) to (6). (15) is a figure of merit combining the several qualitative measures into an odds-weighted, risk-conditioned number.

The blue rows at bottom of Figure 2 aggregate this set of stocks for comparison with a total population of all stocks and aggregates similarly analyzed this day. SPDR S&P500 ETF (NYSEARCA:SPY) provides an investable market index comparison. Top-20 stocks aggregate indicates how most-competitive capital-gain investment candidates in the population compare.


Some of the stocks in this set provide able competition in the potential near-term capital gain contest. Clue: Look for (15) scores equal or better than half of the Top-20 average score in that column.

Our mission is to identify high-probability price gains in the next 3-6 months. These scores are impacted by price changes which are likely to make a difference as time progresses, perhaps making otherwise attractive stocks now more appealing later.

Additional disclosure: Peter Way and generations of the Way Family are long-term providers of perspective information (earlier) helping professional and [now] individual investors discriminate between wealth-building opportunities in individual stocks and ETFs. We do not manage money for others outside of the family but do provide pro bono consulting for a limited number of not-for-profit organizations. We firmly believe investors need to maintain skin in their game by actively initiating commitment choices of capital and time investments in their personal portfolios. So our information presents for their guidance what the arguably best-informed professional investors, through their own self-protective hedging actions, believe is most likely to happen to the prices of specific issues in coming weeks and months. Evidences of how such prior forecasts have worked out are routinely provided. Our website, has further information.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.